AP Moller-Maersk A/S (t/a "Maersk Line") v Sonaec Villas Cen Sad Fadoul & Ors

An exclusive jurisdiction clause may survive the termination or replacement of the main contract sufficiently to permit the designated court to determine whether rights under that contract remain. A straight bill of lading which is not transferable by endorsement or delivery is treated as a sea waybill for the purposes of the Carriage of Goods by Sea Act 1992. Rights transferred to the named consignee may be extinguished when the shipper, entitled to redirect the goods, agrees with the carrier to cancel and replace the bill. Summary judgment may be given where an unchallenged foreign court order establishes the shipper’s authority to surrender the bill and procure its replacement.

The claimant sought summary judgment for declarations concerning a bill of lading covering tiles shipped from China to Benin. The first bill named the first defendant as consignee and contained an English law and exclusive English jurisdiction clause. Following Chinese proceedings, the bill was surrendered to the seller, a second bill was issued to the seller’s order, and a third bill was issued naming an alternative buyer in Honduras.

The defendants relied on proceedings in Benin and disputed the claimant’s analysis of the contractual parties and the seller’s authority. The issues were whether the English jurisdiction clause applied and whether any rights under the first bill survived its cancellation and replacement.

1. Jurisdiction. The court granted the declaration that disputes arising under the first bill were subject to English law and the exclusive jurisdiction of the High Court. The clause covered disputes about whether claims under the bill were subject to the clause and whether rights under the bill continued. Applying the reasoning in Benincasa v Dentalkit Srl [1997] ECR 1-3767, an exclusive jurisdiction clause could determine the continued effectiveness or validity of the contract containing it, even if the main contractual rights had ended.
2. Sea waybill and transfer of rights. Because the first bill was not marked to order but contained or evidenced a contract of carriage and identified the person to whom delivery was to be made, it was treated as a sea waybill for the purposes of the Carriage of Goods by Sea Act 1992. Section 2(1) transferred rights of suit to the named consignee, subject to section 2(5). The original shipper retained rights derived from being an original contracting party, including the ability to redirect the goods.
3. Cancellation and replacement. The entitlement to redirect goods included the ability to agree with the carrier that the first bill should be replaced by a new bill naming a different consignee. When that occurred, rights previously vested in the original consignee were extinguished. The reasoning in Pyrene v Scindia [1954] 2 QB 402 and The Athanasia Comninos [1990] 1 Lloyd's Rep 277 supported the possibility that both seller and buyer could participate in the contract of carriage, although the court did not finally resolve the original contractual arrangements.
4. Effect of the Chinese order. The Chinese court had ordered delivery of the documents concerning the first bill to Yekalon on the footing that Yekalon was the shipper and entitled to the bill. That order had not been set aside. Yekalon therefore acquired, or was confirmed in, the shipper’s rights, including the right to redirect the goods and agree to substitute bills. The defendants’ possible rights against Yekalon under the sale contract did not affect the carriage contract.
5. Disposition. The court granted the second declaration against the first and second defendants, namely that any rights they had under the first bill ended before 18 February 2008 when it was cancelled and replaced. No declaration was made against the third defendant, who was not party to the jurisdiction agreement.

This was a first-instance summary judgment application. The judgment records earlier proceedings before Gloster J and proceedings in China and Benin, but no appeal from a domestic lower-court decision.